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Suggested reading on the gold standard

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Over at Free Banking, Kurt Schuler, an economist at the U.S. Treasury discusses two recent books on the gold standard authored by Lewis Lehrman, former President of Rite Aid, investment banker, New York Gubernatorial candidate, founder of the Lehrman Institute and perhaps most notably a member of the 1981 U.S. Gold Commission team with Representative Ron Paul.

“The basic argument of the two books is that (1) the Bretton Woods version of the gold standard had flaws, but (2) abandoning it was a bad mistake because what came afterwards was even more flawed, so (3) it is desirable to return not to the Bretton Woods version of the gold standard but to the more robust classical gold standard, and (4) it is feasible for the United States to do so alone or with other countries, according to (5) a proposed course of action that Lehrman offers.”

He then goes into the “virtues” and “shortcomings” of each of the books.

In Schuler’s view, chief among the virtues in addition to his clear prose are Lehrman’s distinction” between the classical gold standard, in which the major economies all relied on their own gold stocks for reserves, and the interwar and Bretton Woods systems, which were gold exchange standards,” along with Lehrman’s ability to clearly explain how we would practically return to a gold standard. Schuler’s shortcomings essentially come down to one, that perhaps unsurprisingly he feels Lehrman’s proposals are incompatible with “the spirit and practice of modern banking.”